# Institutional Crypto Adoption and Market Infrastructure

**Podcast:** The Milk Road Show
**Published:** 2026-02-23

## Transcript

I genuinely feel like the moment that we're living in with market structure around the corner, assuming it goes through, is not dissimilar to what we saw with ETFs, whatever two years ago at this point, in terms of the enablement that that will provide to additional capital to enter this space.
Bitcoin took another dip last night, and yet institutional investors are going all in on Bitcoin and crypto.
What does that mean for the market?
And what does it look like when crypto and Wall Street start to come together?
Hello, and welcome to the Milk Road Show, the daily crypto show that knows that when retail sentiment is down, but institutional investment is up, it's time to lock in.
I'm your host, John Gill, and today is Monday, February 23rd.
And today we are joined by Austin Reed.
Austin is the global head of revenue and business at the crypto prime brokerage firm Falcon X, an international business with over one trillion dollars in annual volume.
Austin is going to give us a ton of alpha and insight around how institutions are reacting to this dip and to the crypto market opportunities in general.
So if that all sounds good to you, make sure you like and subscribe, share this episode with somebody who's going to enjoy it.
Today's episode is brought to you by Warbucks, the easiest way to trade crypto and some turn crypto cash chaos into confidence.
And without further ado, welcome to the Milk Road Show.
Austin Reed, how are you, sir?
Doing good, John.
How about yourself?
I'm doing well.
Like I said before the show, I wish Bitcoin was dipping to the upside today.
Um, but this is a great time to do some education and to learn more about the crypto markets.
Um, Austin, I wanted to start with you and with Falcon X.
You are the global head of revenue and business for Falcon X.
As I said, for those who aren't familiar, what is Falcon X?
What are some of the ways you guys serve businesses and generate revenue?
Tell us about your business so people understand.
Great.
Yeah, happy to.
So Falcon X at its core is a prime brokerage for crypto and digital assets.
And what that means is we basically have three primary product verticals.
We have a trading business, we have a credit business, and now increasingly we have an asset management business.
Um, and across each of them, the goal is to basically enable both institutional and B2B2C relationships to grow and expand their activities in this market.
So from a trading business perspective, we're active in both spot and derivatives markets.
Today we're about 20% of global crypto options volume.
We're one of the first firms to be regulated by the CFTC in the United States.
So very active from a regulated derivatives market perspective.
We obviously have a large spot business as well, and are also active from an agency perspective, enabling institutions to get access to global exchanges and cross-margin.
From a credit business perspective, I really think what we're solving there is enabling market participants to unlock greater capital efficiency for their strategies within the space.
Crypto market from a market structure perspective tends to be capital inefficient and like largely built for retail use cases.
And our job is to basically enable institutions to be able to grow and scale their strategies in a more efficient and effective manner by deploying balance sheet and credit to power their strategies.
And then third of the area that we've built really over the last year, primarily through inorganic acquisitions, has been our asset management business, both with the acquisition of 21 shares, which is one of the largest global ETF and ETP issuers, and a taking the majority stake in a firm called Monarch, which manages a variety of different strategies for you know more institutional market participants.
So that's Falcon X at a high level.
Gotcha.
Yeah, a helpful framing there.
And yeah, I think you guys have done a series of acquisitions.
There's been a lot of growth.
I think you're up now on the share of global crypto options volume from 2025.
It was 12 to 15.
It's grown from there even further.
Who are the users that you're primarily targeting, or maybe who are the institutions that you're primarily targeting?
And what products are you seeing the most traction on?
Because like you said, you've seen you have several different um areas of the business.
Where are you seeing the most adoption and what are some of the institutions that are most enthusiastic about your business?
Yeah, great question, John.
And let me zoom out like a little bit first, because I do think that there's multiple different ways to think through this in the scope of our business today, especially including 21 shares and what we've done from an MA perspective.
I think we're uniquely positioned in that at a parent company level, we're servicing everyone from like global banks as they're first enabling their customers or like uh institutions who they're working with to get access to regulated ETF and P ETP instruments to people who go further down the adoption lifecycle and want to trade spot markets, derivative markets, wide uh access credit across both of them.
Um, and if you look at our client base, it's pretty broad and diverse um across each of those businesses.
And so the most active personas, probably not surprisingly, tend to be crypto native players who are consistently active within this market 24, 7, 365, and have a fundamental thesis within the space.
And that's a lot of the historical growth and client base that we've had to find.
Now, as the space has grown and evolved, we're increasingly seeing the emergence of larger traditional financial institutions, either getting active within the space.
You can imagine like large traditional asset managers.
We did a press release with uh a few weeks ago around an index product that we had created for them, uh, to global banks who are basically looking to launch a variety of products and services.
So our goal is to really meet institutions where they are in their adoption curve and service the broadest range uh to basically enable uh through our products and services.
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Gotcha.
Yeah, really helpful there.
I think uh one final question I want to ask on this is just who do you all see as your competition?
Is it the Robin Hoods and the finances and Coinbases of the world?
Is it hyperliquid?
Is it the New York Stock Exchange?
How do you think of yourselves as being situated in the marketplace and and who are some of the the other competitors that you're distinguishing yourselves from?
Yeah.
I'm smiling because the competition question is always a little bit difficult because we are active in many different areas within this space.
And so the competitive landscape is like a little bit different depending on who we're talking about.
I would say it's definitely not Robin Hood, because we're not active directly uh on the retail side of the market, although we do service like back-end four firms that basically offer crypto products and services to retail customers on a B2B to C basis.
But if I look at where we're active, look, we have a large uh bilateral OTC trading business in both spot and derivatives markets.
Our goal there is to basically aggregate liquidity from global sources and enable our customers to trade either regulated derivatives instruments or spot instruments.
You could argue that that competes with a variety of different players within this space, but it also is a uh, we also partner with a variety of different market participants to basically enable that.
From a credit business perspective, people typically look at us and Galaxy and Coinbase in terms of having the largest loan books that are active within this space.
And then on the ETF and ETP side, um, with the 21 shares acquisition that we've done, obviously, you know, there's uh several crypto native asset managers who are live and active with those instruments.
So it's a pretty broad range of different players.
Um, I would say that our goal is to create a seamless experience across all of those different businesses in a single platform that enables our customers to be active within this market um and to just build a differentiated experience to enable that.
So I know it's a little bit of a non-answer, but I think it's a little bit tough to get depending on where you're talking about within the space.
That's exactly why I asked the question.
Because if if I had to answer it, I wouldn't know how to do it either, because of the diversity of businesses and how that uh looks different in different ways.
Um, but it is helpful to just give that framing so our audience knows that context.
Um, I believe the quote was to advance the convergence of digital assets and traditional finance, which is I think a big subject a lot of people are thinking about these days.
Tell us a little bit about this partnership, this acquisition.
How has this played out since then and what success has this unlocked for Falcon X?
Yeah, I appreciate the question.
So, yeah, we announced uh 21 shares acquisition in Q4.
And I think that you mentioned the word convergence.
Like, I think that we are in the early stages of the convergence between crypto markets and traditional financial markets.
And even more broadly, I'd say traditional financial markets and blockchains through like tokenization and on-chain trading, etc.
Um, and within that, if we look at what's interesting to us, is today, like in Q or in Q1, I should say, like we've seen the ratio of spot to Bitcoin ETF volume like flex to like 50%.
So, like a significant portion of the future trading activity that's happening within this market is going through regulated instruments and through existing distribution channels.
That's through distribution channels like traditional banks, brokers, et cetera, that are enabling their clients to get access to different product offerings within the crypto space.
And so if you zoom out and you think through our goal as Falcon X in terms of like enabling different both institutional market participants and broader market participants to scale and grow their strategies that are active within the market, we think a deep partnership with someone like 21 Shares and enabling them to grow and scale across both Europe and the United States really helps provide a diversity of potential product offerings.
And I think we're relatively early in terms of what we've publicly announced there, but you can imagine many more products and services that they may bring to market as the asset management market continues to grow and scale, and as we see more financial institutions look to get active within this space.
Gotcha.
I appreciate that.
So institutional investors are now interested in digital assets.
The popular products, as you've pointed out, has been these ETPs, these ETFs.
How, in your view, has that changed the crypto markets?
Like what has been the impact of that?
Do you think that trend continues into 2026?
Do you think that's a momentary thing?
But as the market matures, these won't be such a dominant force.
What's your view on these ETPs, ETFs as we go into 2026 here?
Yeah, I think it will continue for the foreseeable future here, right?
Like I said, we're at like a 50% ratio in Bitcoin in terms of like ETF to spot volume.
And I would expect that to continue to grow and scale over the coming years.
And so I don't know where it ends up from an end state perspective, but I think you could easily see like 70% of volume happening through ETFs.
And I think it's just a reflection of the uh of the growth and emergency or changes in this asset class in terms of going through more traditional and regulated institutions, right?
If you also look at like derivatives markets as an example, we've seen substantial growth both in regulated derivatives markets with the growth of IBIT options, right?
IBIT options are 50% of global crypto options volume today, obviously from zero pre-ETF launch in a relatively short period of time.
And you've also seen basically in Q1 this year, for the first time, uh open interest and options actually exceed open interest and futures in the space.
So I think it's generally a good thing for overall adoption and uh this asset class growing and scaling.
And like I said, we're still at the early stages from my perspective.
Gotcha.
So with these conversations you're having with a lot of these institutional clients, um, I'm curious the sentiment and how they're handling the current market dynamics and just downturn we've seen, right?
Because retail sentiment has gotten abysmal.
Um, but institutions seem to still be very interested in crypto and digital assets.
What have those conversations been like?
Have you seen any drop-off or pickup in institutional demand for crypto at this time?
Like what's what's the vibe like in that?
Yeah, short-term markets are obviously uncertain, right, John.
Um, and I think we've seen price action basically reflect that.
I think what's different is depending on the institutional segment that you look at, um, they just have a much longer time horizon in terms of getting active within this space, right?
Like obviously, we've seen a lot of the like crypto native players get hit a bit, like performance is down, et cetera.
And that just means they have less dollars to deploy.
And when they have less dollars to deploy, they're going to be less active because you know they have less money.
Now, if you think about um the more like traditional longer term institutions, what we've seen from a Falcon X perspective, and what makes me quite excited from a mid to long term perspective is like really a significant acceleration in global banks and asset managers setting up uh the pipes to be active within this space across a really broad range of products and services.
I've been in crypto for eight-ish years at this point, and Falcon X focused on institutional crypto for seven-ish.
Um, we've never had this level of like interest adoption and like genuine work being done to set up the infrastructure here.
That said, John, it's not like a tomorrow thing, right?
These guys are not, they're long cycles.
There's a lot of work that needs to be done.
And clarity and from a regulatory perspective is a bit of a prerequisite for some to enter the space.
But I think that midterm outlook is super interesting and probably as positive as I've seen in my time in the space.
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Gotcha.
So they're looking through the short-term volatility towards the medium to long-term investment strategy and not getting shaken.
Um, that's encouraging to hear.
I'm glad that I'm not the only one doing that.
Um, I I want to ask you since you brought up the Clarity Act, in September of 2025, you did an interview with Senator Tem Scott, and I believe you've spoken to him multiple times actually, but you you talked about this shift in the positive nature of the regulatory landscape.
But there's a difference between you know regulators like the the SEC and the CFTC being positive versus legislation being passed.
Um, and the Clarity Act has now been delayed several times in Congress, and there's a lot of doubt and uncertainty about when it'll get passed, what it'll look like if it does.
You know, since that conversation in September, what is your updated outlook on this?
Do you think we get clarity?
How important is it for that to come through?
What's your what's your read on that situation now?
Yeah, million dollar question here, right?
Um I think look, it's looking more likely than not that it goes through.
It's difficult to hold your breath and predict exact timing on anything in DC or regulatory related, um, as you just referenced.
Um, but I do think that the difference that we've seen, you know, we've be been more and more active in DC over the previous years, is it remains a focus, and I think people genuinely want to get something done.
I looked at polymarket odds at the end of last week.
I think they're trending up to like 75%.
I think that that's where the market thinks it is.
Um, and I'm optimistic that something goes through.
I think that that will be a big unlock for the space if it does happen.
How important has the regulatory shift been outside of the legislative action we've seen?
Like the SEC, the CFTC, they've been much more constructive.
They've been very open about making this a priority.
Has that been a needle mover for your business, for your clients?
What's the impact of that been so far?
So I think it's huge from a narrative perspective and enabling like so much of the work that needs to be done right now in crypto, from my perspective, is just opening up net new distribution channels and pools of capital.
If you think about how powerful the Bitcoin ETFs were a couple of years ago at this point, like the fundamental unlock was creating uh regulated instruments that enabled a broader range of both retail and institutional market participants to purchase these assets, right?
And it drove a tremendous amount uh of overall adoption.
I think that what we've seen in terms of a much more friendly regulatory environment under this administration has been super positive in terms of encouraging more uh traditional financial services firms uh to invest time and energy and basically getting up and running within this space.
I think that at this point you've seen basically every large bank and asset manager say publicly that they are investing within crypto and tokenization and that they believe they're both real technologies.
If you rewind like what, two years ago, John, that's not the case, maybe even a year and a half ago, right?
And so, like it's that emergence, it's happened super fast.
And that's the overall narrative side.
Now, I think there is a little bit of a gap right now, which you're referencing between like people spending time and investing and getting ready to get up and running versus like actually doing so.
And the catalyst for that will be clarity or more rulemaking that basically enables people to feel a little bit more comfortable.
If you think about like if you're top five global bank is an example, like you're not gonna take risk within this market, but what we've seen, given our product suite, is players start with more regulated instruments that can be live and active today, right?
So, like ETFs are a great example there, where we've seen distribution of ETFs across a broad range of regulated institutions.
And in our business, lar a significant portion of the success of our regulated derivatives business has been that people face us in a CFTC regulated swaps dealer with a bilateral ISDA the same way that they are active in any other asset class.
And it doesn't actually need um any additional, you know, regulatory guidance around that.
So I think you're seeing people start in different areas, but I think that the ground swell will definitely continue as we get more momentum, uh, or if and when we do, I should say.
Gotcha.
I want to ask you one more question about politics, and then I'll leave you alone, I promise.
But um, President Trump has been very vocal about saying that he wants the United States to become the crypto capital of the world.
Falcon X is obviously an international business.
Uh, from your perspective, is there stiff competition to become the crypto capital of the world?
Is the United States winning that?
Or how do you see that that shaking out the progression of that?
Yeah, I think the US is winning right now, and I think the US is best positioned to win this, but it's not a hundred percent right now, right?
The US is the largest financial markets in the world.
Um, and if you look at the potential to grow and scale businesses in the United States market versus a lot of other global markets, like I think it's super interesting and attractive to be investing here and investing in the United States and growing and scaling that the US.
The the question becomes is whether or not we uh get like final regulatory approval in some of these areas, right?
And like I said, optimistic that that that happens.
Even if clarity doesn't happen, I'm optimistic that we'll get some rulemaking out of the CFTC and SEC that will provide greater rules for the road.
Um but John, as you know, like I think people underestimate how global of an asset class this is right now, right?
The majority, vast majority of volume happens offshore, right?
Um, and so I think that it actually is a uh global competition, but I I see it as more like the US has the most interesting and robust capital markets in the world.
If the US can basically get um in a position to uh have clear rules and regs that enable growth of this market, we will be in a really strong position.
I think that's a net positive uh for the industry um overall.
Um but I think it's also encouraging to see other global jurisdictions around the world actually, you know, come up with clear uh rules and regulations that can enable firms to invest there too.
And we're active globally.
We're active in the US, we're active in Europe, we're active um in Asia as well.
So very much believe crypto is a global asset class, but I think the US is definitely poised to be uh the leader.
Gotcha.
I really appreciate that answer, especially because I like the United States and I live here.
So um I I want to ask you a question around something we've touched on a little bit, but it's a big objective of Falcon X to focus to provide um market infrastructure.
And I wonder if you could just explain a little bit to our audience exactly of what that means, why this matters so much, and what the opportunity is for Falcon X.
Because I think people are aware in the equity space of this robust you know market infrastructure that backstops the US equity market equity market, but the digital asset market is still kind of evolving in what that landscape looks like.
So talk to me a little bit about market infrastructure and the role you see for Falcon X there.
Totally.
Um a couple different areas that I would focus on here.
Um if I think through when we first started Falcon X, and I joined Falcon X like at the very beginning, um, so seven plus years ago at this point, it was part of the founding team.
One of the earliest problems we were focused on solving was just like providing institutional size orders for market participants that were active within the space.
Back then, it's like 2018, 2019 time range.
Like if you did like a hundred K to 250K order, you would move markets and have like incur substantial slippage, right?
And if you're thinking about okay, how do you enable institutions to be active within this space?
Like you had to focus on large block trading and giving people certainty for price and execution.
And that focus on trading has evolved over time to be not only that spot trading business is still a core business of ours, we're the back end to a number of the leading asset managers, including ETF issuers, um, working with most of the big crypto native firms who are active within the space, whether there's a hedge funds, venture funds, um, et cetera, and increasingly like these global banks as they're um turning on their activity.
So that was like one of the first problems that we saw, which was execution quality uh quality and liquidity.
We also moved to basically solve um capital efficiency within this space.
John, if you think through like if you're a hedge fund who's active within this market and you want to run a market neutral strategy, for example.
So, like you don't want to take directional positions on crypto, but you want to take advantage of basically some of the either inefficiencies or different opportunities within the market.
Imagine you're operating across five exchanges, you go deploy capital across all those different exchange venues.
None of them talk to each other, they all operate on a fully funded basis.
And you uh, if you're short futures on one long spot on the other and running a basis trade, like they don't know that you actually have a market neutral position, right?
And that's the role of a prime brokerage in traditional markets, and that's the role Falcon X plays in uh crypto markets, which is through our direct market access platform, we can enable institutions to trade on a variety of different exchanges, cross margin across all those venues.
We added hyperliquid and CME recently, so we're very excited about that convergence between DeFi and TradFi venues and extend credit to enable our customers uh to have a much more capital efficient uh approach to the space.
So that's another problem that we've basically solved.
And then, like I've mentioned, we've moved to focus on building out and scaling regulated derivatives and infrastructure as well.
Um, and the way that I really see that is what we've seen is a significant growth in demand for derivatives in this market overall.
If you look at the ratio of spot to derivatives trading in crypto, it's still relatively small in relation to other asset classes.
I think it's roughly like two to one.
I need to look at the most recent numbers.
But if you look at the where most evolved and scaled asset classes are, like you can imagine that being three to five X in relation to the amount of derivatives uh trading volume versus spot.
The reason that's important, John, is like what you get with a robust derivatives market is actually a lowering in volatility over time because people have the ability to hedge and take more nuanced positions within the market.
And like I said, we've seen a significant growth in the options uh market in crypto in a relatively short period of time.
And we've made a big bet there and are the largest market participant on the crypto native side.
Um, and I still think we're at the relatively early stages as adoption continues to grow and scale.
Um, but you've also seen that actually lower implied vol uh in relation to BTC quite substantially, which I think will increase broader adoption over time.
Um obviously, from an asset management perspective, like I mentioned, we're active in basically creating regulated asset management products through our 21 shares and Monarch's uh subsidiaries, enabling distribution of those products through different channels.
So broad range of different products and services.
In its simplest form, our goal is if a institution or other market participant wants to launch in crypto, Falcon X provides the broadest suite of products and services to enable them to do that.
And there's a whole technology platform that's built across that, et cetera, too.
But that's where we've been focused and building over the last eight-ish years at this point.
Gotcha.
Yeah, that's a really comprehensive and helpful answer on that.
I want to ask you a couple of questions about another sector of the business that you guys have that you've alluded to.
But what are you seeing across crypto credit markets?
And is institutional capital actually coming into this space?
What does that look like?
What does that mean?
And why does that matter for investors to know about?
Totally.
So we've seen a lot of growth in the credit markets and specifically in our credit business.
To give you some context, we've a little over 1.5 billion dollars in loans outstanding to customers right now.
If you look at that versus other centralized lenders, we're top three, depending on uh the quarter, um, just based off the public companies and what they report.
So a big and you know, continually thriving and growing business within that segment.
John, I think there's like two interesting insights here.
One is that you're seeing more traditional sources of capital, whether those are like banks, private equity firms, et cetera, look to take uh Bitcoin specifically as collateral, right?
And so a lot of the work Falcon X does is basically acting as a distribution mechanism for some of those partners to a more crypto native audience and facilitating those transactions in between.
Um I think Bitcoin is like that that acceptance as Bitcoin as actually very good collateral is a big evolution within this space.
If you think about how fundamentally underbanked this market has been forever, the fact that you have more traditional players coming in and doing that, I think is really positive.
Um I think you see the lights go on in people's eyes a little bit because they realize, oh, this collateral uh is liquid 247, 365.
And a worst case scenario, I can move out of it whenever, right?
Like the risk profile of that versus so much of what people lend against is actually superior, right?
But the question is your collateralization and um making sure that you're overcollateralized know how to trade out of it, et cetera.
So like we're definitely seeing growth and momentum in that market.
I would say it's still relatively early stages, and people are trying to understand, like from a more traditional finance perspective, how to be active.
That's one of the reasons that we uh, you know, have grown our business so substantially is they can partner with us to basically get that distribution.
Um, I also think we're seeing a really interesting growth in on-chain credit markets and uh the connection of like on and off-chain credit liquidity, right?
So we have uh one of the largest uh vaults on Morpho, uh, which is basically selling off participation in our loan book.
So overcollateralized loan book that basically people can purchase um the right to uh get a portion of the returns.
Um, and I think it's super interesting that there's that on-chain distribution.
It's essentially like an on-chain ABS like instrument um that can really um, I think from an end state perspective, democratize access to fixed income vehicles on chain and uh via tokenization.
So I'm super excited for that too.
Um and I think we're at the relatively early stages, but I think it's growing quite quick.
Yeah, I'd like to just unpack that a little bit more because this this whole idea of credit, like RWAs, tokenization, on-chain credit, uh tokenized gold, tokenized many other things.
Um, there's a lot of talk about this.
There's been a lot of growth, obviously, but there's still kind of this like situation in the markets where I think a lot of, especially retail investors aren't sure if this is a theme that it can be allocated to yet, or if it's still something that's just prototypes and nascent says.
What's your view on that?
Where are we in that that progression here?
Oh, this is a great question.
Um, and a lot of active conversations that happen here.
I look, I think that the what's really hard when you talk about tokenization is like it is such a broad term that applies to so many different vehicles that people are trying to take out in variable ways, right?
My mental model for tokenization and what's worked today.
One, stable coins has been the biggest demonstration of tokenization at scale, the tokenization of fiat currency on chain in the hundreds of billions of dollars range.
I think what you've clearly seen is that enable broader global distribution of US dollars and enabling people to hold that as like an alternative currency for themselves, enabling cross-border payments in stable coins.
Like I was in Brazil recently, a lot of the conversations that we were having was like tether as a mechanism for cross-border payments, uh facilitating trade across different regions.
I think that's fascinating.
Um, that's basically happening.
And we're seeing a lot of investment across the board, both from the leading stablecoin companies and like net new entrants to compete in the stablecoin space.
So mega trend, I think the tokenization of fiat currency will continue.
I think it's mostly going to be in dollars.
That's just my own personal uh perspective.
Two, I think the interesting trend that we're seeing right now is actually a bit of the re-emergence of DeFi with hyperliquid specifically and on-chain 24-7365 trading um being highlighted as a value proposition that can extend to some other asset classes, right?
Like if you look at hyperliquids uh metals markets uh that have really just emerged over like the previous couple of months.
I mean, hyperliquid is like 2% of global silver volume in two months of launching.
Like that is a massive market uh to be able to get um that scale of distribution.
And if you look at the volume data, the interesting thing is that it's the vast majority to like maybe 100% of volume that's happening on nights and weekends.
Right.
And so, like, I think that the the in enabling more V like commodities, other vehicles to be launched on chain 247, 365 tradable via perps, like is a super interesting use case.
I don't know that it matters too much to a lot of those users, whether the underlying assets are tokenized or they're just synthetic.
I see our role within that and we've done some public announcement is like we're very focused on enabling cross margin across those venues.
So someone can be trading the hyperliquid um gold or silver perps and like cross margin that against their traditional portfolios.
I think there's a huge opportunity and growth and scale there.
And I think we're at the relatively early stages.
And then in relation to gold and commodities markets specifically like we have these tokenized gold instruments, we're starting to see more interest from our customer base there.
We're quoting derivatives on them.
And so I think that you'll see a more activity that's basically happening.
In addition, you have the whole securities tokenization world, right?
The securities tokenization world though, I think is a fundamentally different approach due to the regulatory considerations that are core to securities markets and have to be right.
And so I think that where you're seeing that emerge more is like everything I just described were on open blockchains 247365 transferable and no like whitelists or other concepts like that.
The securities tokenization is typically either two models is one dependent on like a centralized whitelist who essentially acts as the transfer agent, or two, dependent on uh like a private blockchain that basically knows all the market participants there and someone's basically saying yay or nay uh to these uh instruments.
Um, I think that there's super interesting work that's being uh done across both of those different areas.
But I think the interesting thing to your point is it's not exactly clear to a lot of people where they should deploy capital to get exposure.
I do think what we've seen is uh the public markets have been a vehicle for that, though, right?
With the circle IPO specifically and how well that asset performed.
And then if I look at the best pure play allocation from a tokenization perspective in public markets, it was largely figure, and I think they performed quite well there too.
And so I think that the market's just evolving in terms of where you can place those bets as well.
Austin, I'm a little bit surprised but very enthusiastic to hear such a robust answer from you on that question because it means that this is top of mind.
It is actually real, it is actually growing.
There's getting a lot of attention and energy going into it.
Um, yeah, here at Milk Road, our top researcher Martin has been very bullish on on DeFi, but also on what you said, this great on-chain migration of credit, of lending, of finance.
Um, so we're we're gonna see that accelerate, I'm sure.
Uh, I can ask you a lot more questions on that, but I want to kind of get your ideas on the the year ahead and where you're focusing your energy uh in the year ahead.
I know you're you said you're in Vegas right now for the microstrategy conference there.
Um, but what are you focused on in terms of you know evangelizing new customers, new products?
Where's the energy for you going in 2026 for Falcon X for continued growth here?
Yeah.
Um, yes, at this event this week, we've got an exciting announcement in a couple of days.
So stay tuned for that.
Um but um look, I think that the mega trend that we're seeing here is just the con is is the convergence between crypto markets, traditional markets and traditional markets on chain, um, like we mentioned.
And I think Falcon's X's role is to facilitate both sides of that and providing the fundamental uh liquidity and like platform infrastructure across spot, derivatives, credit markets, and asset management vehicles to enable um that next stage of adoption.
Um the reason I give that context and say that is like if we look at where we focus over the next year, a couple of things are gonna happen.
One, I think you're gonna see most global banks offer crypto products in a much more expanded function to their customers.
I'm spending a lot of my time in that segment, and I'm quite excited about the evolution there.
I think you will also see a lot of leading global fintechs look to really expand their product suite within this space and probably do some more innovative and unique product offerings than you're gonna see from the legacy banks.
Um the reason I think that this is a convergent story is I think it's also a reflection of a lot of the retail-centric exchanges essentially moving to become everything stores and somewhat compete with retail uh banks and brokerages from traditional markets.
So if you're traditional player, part of your equation in your head needs to be: I need to have something in this market, because why would I risk losing some of the users that want to prioritize this?
And I think that that's just like in its most fundamental and simple way, like what will drive a lot of additions to platforms.
Um, and I think that's gonna be hugely powerful from an overall adoption perspective.
I genuinely feel like the moment that we're living in with market structure around the corner, assuming it goes through, is not dissimilar to what we saw with ETFs uh whatever two years ish ago at this point, in terms of the enablement that that will provide to additional capital to enter the space.
Short-term markets are uncertain.
I don't know where crypto is going to be in the next quarter, right?
Um, you know, we all have perspectives on the market, but I think if you zoom out, it's a really interesting time.
So that's where we're spending our time.
Our goal is to be there for our customers through these periods of volatility to enable them uh to be able to access this space, trade 24-7, 365, access global credit markets, and to enable that next generation of adoption within this space.
And I think interestingly, like I per the conversation we just have on tokenization and DeFi, I'm super excited about us growing and expanding our activities across both enabling credit markets versus hyperliquid enabling on-chain credit markets.
We've already made a lot of progress there, um, but I think it's still early stages.
Austin, I'm getting excited having this conversation with you.
I want to ask one more question here.
There's this feeling that there's a huge amount of pent-up demand or just like loss of interest, but it does feel to me a lot like what you said.
Like we are kind of before this moment where the ETPs, the ETFs get approval, and then there's this huge wave of capital that's unlocked.
I've seen you comment on this on Twitter before, this institutional tipping point.
I think you've called this.
What do you think we need to see to really bring that in?
Because it seems like we're seeing, just like you said, lots of people taking this seriously, lots of real products being offered.
Do you think that there really is this huge amount of pent-up demand from institutions and they're waiting to make this like you know, billions of dollars of allocations?
What is your perception on that?
And is that real or am I imagining things?
I think short answer is it depends a bit, right, John.
So look, I think that unquestionably, the more platforms that launch crypto products and services, the more dollars that will come into this space will be.
And like just I think people forget even Bitcoin ETFs, right?
So much of the narrative around Bitcoin ETFs when they first launched was this was going to open up the investment advisor channels, right?
At like major banks, like traditional uh like independent RAs, et cetera.
That is just happening in a lot of these different areas.
Like literally just starting to get activated.
And so a lot of the initial activity that you saw was like hedge funds and other market participants running basis trades or getting active and getting exposure to space.
All great.
But like those longer-term channels take a long time.
And I think we're still in the relatively early stages.
I think there's also an interesting component here, which is the more people that have products and services in the space, the more incentive they all have to basically like go out market and like bring more capital into them.
And I think especially on the asset management side, you will see uh that drive more.
Um, and so I think that crypto is very well positioned in terms of just opening the aperture of potential capital uh that can come in.
I think the space has work to do too, right?
Like I think Bitcoin is a very strong like core thesis around it.
I think it got hit a little bit in the last like quarter, quarter and a half.
From my perspective, like, look, if you've been in crypto a long time, it's all good, right?
Like these things happen.
Um, you're gonna see short-term shifts in market momentum, et cetera.
If you zoom out and you look at like the three year time picture, like we're in a very strong position.
I think where we're seeing other assets is definitely a flight to quality in terms of like people looking for tokens and protocols that have real fundamental value.
And I think that's important for the space.
And I think that those ETFs across those and like some of the majors will be a significant driver of flow in the markets on a go forward basis.
And then I'm optimistic that like tokenization and more on-chain trading activity will continue to drive uh more activity uh on-chain and into the market.
I think that like my mental model for the best way to be active there is like our goal is to be the largest liquidity pool that's active within this space across spot derivatives, credit markets, et cetera, that I've mentioned.
And the market's job is to basically decide what's interesting in relation to tokenized instruments or in relation to on-chain trading.
And we saw that like jump in like metals trading on hyperliquid over the last quarter.
I don't think anyone would have predicted that two years ago, right?
In terms of like that being where you saw a lot of that activity.
And so I think our job is to basically position have the best infrastructure, strongest um distribution and client base.
And then wherever that grows, and I think we're getting some early signals that like tokenized metals and perpetuals in that segment are interesting.
We'll be active and we'll be enabling that for our customers.
Austin Reed, global head of revenue and business at Falcon X.
Thank you much so much for being on the Milk Road show.
Where can we send people to find more of you and your work online?
Yeah, so you can look at my like semi-active Twitter um at Austin Reed R E I D 21.
Um the Falcon X channels are a good place to be, right?
So if you uh go at Falcon X Global uh on Twitter or active on LinkedIn too.
Um, I think we put out a lot of interesting information, research, et cetera.
And uh always feel free to ping me on those.
Austin, I really appreciate you coming on the show.
It's really great to get some insight into what's going on with institutions and and what's happening in that space.
So thanks for being on the show.
Thanks for sharing with your our audience today.
And I hope we can do this again soon.
Thanks, John.
I appreciate you having me.
And thank you all for joining us.
I hope you all learned something today and got a little bit more bullish.
So until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of the Milk Road Show.
Thanks for being here everyone.
Bye.
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